Sales of existing homes rise in October

WASHINGTON (MarketWatch) — Sales of existing homes rose in October, with gains in three of four regions as activity continues to bounce off post-recession lows, the National Association of Realtors reported Monday.

Reuters

A "for sale" sign is seen outside a home in New York June 19, 2012.

Existing-home sales rose 2.1% in October to a seasonally adjusted annual rate of 4.79 million from a downwardly revised rate of 4.69 million in September. A prior September estimate pegged the level at a 4.75 million rate.

While still far from 2005 levels above 7 million, home sales have recovered from a July 2010 low of 3.3 million. Other housing-market indicators have shown signs of improvement, with gains in prices, sales and homebuilder sentiment.

Looking at longer-term trends, existing-home sales are up 10.9% from the prior year. The median existing-home price nudged up in October to $178,600, and is up 11.1% from the prior year.

Inventories declined 1.4% to 2.14 million units in October, representing at the current sales rate a 5.4-month supply, the lowest since 2006. Limited inventory is putting pressure on home prices, according to NAR.

“The low inventory number is a sign that housing markets are tightening, and that builders will continue ramping up on new construction to fill demand,” said Patrick Newport, U.S. economist at IHS Global Insight.

Regionally, only the Northeast saw lower sales in October, with a decline of 1.7%, due in part to Hurricane Sandy, which hit the area late in the month. There could be greater effects from Sandy in coming months, NAR said.

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